The police got a tip-off that some persons were looking for customers to sell the hide of the striped animal for about Rs 8 lakh, Superintendent of Police Gaurav Tiwari said.
A team was constituted and a trap was laid. The police kept a watch on the movement of these persons, he said.
As three of the accused yesterday arrived at the house of Sandip Ahirwar (22), a resident of Rani Kamath area here, to sell the hide, the police team arrested the four men from the spot, he said.
The SP claimed that during the interrogation, the accused said they got the tiger hide from another person, a resident of the district's Kabalpipla village, who is absconding.
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He said once they are able to arrest the absconding accused, further details about the source of the tiger hide would be known.
Chhindwara's Chief Conservator of Forest U K Subuddhi said all five accused have been booked under relevant sections of The Wildlife Protection Act.
"Efforts are underway to arrest the absconding accused," he said, adding that "the hide seems to be around three months old."